Fed Repeats Pledge To Keep Rates Low, Gold Rallies
December 17th, 2009 by Katy Loi
Closing Data
| Current | Change | % | |
|---|---|---|---|
| Dow Jones | 10441.12 | -10.88 | -0.1% |
| NASDAQ | 2206.91 | 5.86 | 0.3% |
| S P 500 | 1109.18 | 1.25 | 0.1% |
| FTSE 100 | 5320.26 | 34.49 | 0.7% |
| Nikkei 225 | 10177.41 | 93.93 | 0.9% |
| ASX 200 | 4,662 | -11.6 | -0.2% |
| COMEX Gold - Dec 09 | 1136 | 13 | 1.2% |
| COMEX Silver - Sep 09 | 17.695 | 0.24 | 1.4% |
| COMEX Copper - Sep 09 | 320.8 | 6.65 | 2.1% |
| WTI Spot | 72.66 | 1.97 | 2.8% |
| AUD-USD | 0.9003 | -0.0057 | -0.6% |
| Aluminium | 2204 | -61.5 | -2.7% |
| Copper | 6800.5 | -119.5 | -1.7% |
| Lead | 2294 | 3 | 0.1% |
| Nickel | 16730 | 40 | 0.2% |
| Tin | 15260 | 105 | 0.7% |
| Zinc | 2276 | -5.5 | -0.2% |
U.S. stocks erased most of their early advances on concerns the Federal Reserves near-zero target for interest rates will stoke inflation. The Standard & Poors 500 Index added 0.1 percent to 1,109.18 paring a gain of as much as 0.8 percent. The Fed repeated its pledge to keep interest rates exceptionally low for an extended period, driving metal producers, energy companies and banks to the steepest gains among 10 industries in the S&P 500. Policy makers restated that low rates of resource utilization, subdued inflation trends, and stable inflation expectations are needed for interest rates to remain at a record low. The Fed also pointed to stable inflationary expectations for some time to come, which would keep low interest rates in place, the dollar weak, and support gold investments.
Today is the expiry day for December equity options as well as SPI futures for December. Our market looks to open fairly flat as it stills struggles to break 4680 with support at 4640. We could see a buildup of momentum during the day on up side after 6 sessions of range bound trading as offshore investors may look to Australia for higher yields. Analysts are in support of banks after their recent consolidation whilst resources may start to stabilize, particularly laggard stocks such as WDC , QBE and ANZ. The SPI futures finished up 4 points with a late rally on the close and has once again bounced off the uptrend line support. We may see this buying strength continue through today with potentially 40 points to the upside at 4700 over the next couple of days. The market is now retraced exactly 50% of the three day rally early this month, next resistance levels would be 4700 and 4743.
In company news, QAN has welcomed the Federal Governments confirmation that it will remove restrictions on the amount of interest in Qantas held by foreign airline shareholders, saying it is an important step forward.
WBC has again tried to defend its decision to raise interest rates by 45 basis points, by saying that it would do no favours to anyone by offering mortgages at rates that it knows to be unsustainable.
LLC has announced that a consortium including Lend Lease managed funds has been appointed preferred bidder to acquire the 14 assets of the $1.4 billion ING Retail Property Fund.
Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.
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